The Federal Reserve voted to keep interest rates at a 23-year high Wednesday, as inflation continues to climb.
The Fed is waiting for inflation to hit the sweet spot of 2%. With Joe Biden at the helm, it will be waiting a long time.
Raising interest rates during a time of high inflation is just one tool in the kit to bring costs down. Getting a tighter rein on spending is crucial. Biden must have been absent when this was covered in Economics 101.
The president hasn’t tapped the brakes on running up the national debt, not by a long shot. It was announced Wednesday that the Biden administration gave the green light to cancelling more than $6.1 billion in student loan debt held by borrowers who had attended The Art Institutes, a now-defunct network of for-profit colleges. This is on top of the $160 billion in student loan debt Biden has forgiven since taking office.
As CNN reported, the Department of Education found that the schools misled prospective students about graduates’ job placement rates and average salaries.
Biden’s quite proud of fiscal free-for-all. “While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve,” Biden said.
The inflation rate was 1.9% under your predecessor, Mr. President. Today it’s 3.5%, and the effect on the cost of groceries and other necessities is being felt by families around the country.
It would help if Biden saw spending cuts as “inflation relief,” and gave it the same importance as student debt relief. And since he’s splashing out the cash to help those defrauded by colleges, how about some financial help for Americans who believed the line that inflation was “transitory” way back when, or who thought the Inflation Reduction Act meant just that.
True, you can get a $7,500 tax break to buy an electric vehicle, but where’s the assist when shoppers have to shell out $10+ for a roll of aluminum foil? Between the cost of beef and hotdogs, summer barbecues are looking to be lean affairs.
Families who struggled with grocery costs would often put the week’s shopping on their credit cards. Thanks to interest rate hikes, they’re shelling out more to pay that off, too.
But for Biden and the Fed, inflation and rate hikes are abstract numbers. Those hikes are hitting Americans hard.
As The Hill reported, the cost of buying a home has hit an all-time high, thanks in part to high mortgage rates.
“The Fed’s high interest rates are exacerbating our housing crisis while doing nothing to tackle the high prices that remain. Meanwhile, sky-high borrowing costs have pushed household debt to an all-time high and delinquencies are rising,” said Rakeen Mabud, chief economist at the progressive Groundwork Collaborative and a former Treasury Department staffer.
“The Fed is failing families struggling to get by and failing to bring down inflation. (Fed) Chair (Jerome) Powell should move to cut rates,” Mabud added.
Biden continues to open the financial spigot for student borrowers in a bid to earn their votes in November, but families hamstrung by high prices aren’t impressed. Will Biden wake up and smell the overpriced coffee?
